The proposal made on Tuesday, would give wireless companies access to another 95 megahertz of spectrum - almost 20 percent of the target set by the Obama administration for freeing up airwaves for broadband use.

The wireless industry is pushing for access to more airwaves because of the increasing popularity of bandwidth hungry devices such as Apple Inc's (AAPL.O) iPhone and iPad and smartphones based on Google Inc's (GOOG.O) Android software.

In 2010, the administration said it would make 500 megahertz of spectrum available in the next 10 years. However, it has been criticized for making little progress since the Justice Department blocked AT&T Inc's (T.N) $39 billion plan to buy smaller rival T-Mobile USA to pool their spectrum.

The Commerce Department's National Telecommunications and Information Administration (NTIA) has proposed sharing a spectrum band between government agencies and commercial users since it may not be possible to relocate all of the government operations to alternative spectrum bands.

"It is increasingly difficult to find desirable spectrum that can be vacated by federal users as well as spectrum in which to relocate these federal operations," NTIA Administrator Lawrence Strickling said.

In a report released on Tuesday, the NTIA identified the 1755-1850 MHz band, currently held by government users, as capable of supporting wireless broadband services.

Strickling said that the proceeds from an auction of that spectrum band might not exceed the cost of relocating government operations and could take more than a decade.

As a result, the NTIA proposed a combination of relocating some federal systems and allowing others to share spectrum with commercial service providers.

More than 20 federal agencies currently hold more than 3,100 individual frequency assignments within the spectrum band. The uses include critical government functions such as law enforcement surveillance, military tactical communications, air combat training and precision-guided munitions, the agency said.

Some 115 megahertz of airwaves used by Commerce's National Oceanic and Atmospheric Administration satellites to disseminate severe weather alerts as well as by the Defense Department's radar systems on ships were already identified by NTIA in 2010 for reallocation to mobile broadband use.

"Ultimately, repurposing these 95 megahertz combined with our prior recommendations would bring the federal agencies' contribution to 40 percent of the president's 500 megahertz goal," Strickling said.

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Strickling said the NTIA would hold meetings between the wireless industry and the affected agencies to develop new sharing techniques and find ways to reduce the time and cost of repurposing the airwaves.

"We have to recognize that technologies already exist today that allow commercial uses to take advantage of some of these opportunities in terms of sharing," said Karl Nebbia, associate administrator of the NTIA Office of Spectrum Management.

The agency said it would hold off making a formal recommendation to the Federal Communications Commission to reallocate these airwaves until the challenges posed by spectrum sharing were resolved.

"There's an acceptance that some form of sharing is inevitable, but the primary goal should be to clear as much of the spectrum as you can," said Chris Guttman-McCabe, vice president of regulatory affairs for the wireless trade association CTIA.

He warned officials that restrictions to protect government operations could swallow the value of the spectrum and discourage companies from bidding.

The agency had no forecast on how long it could take because the process would require a system-by-system evaluation to determine which government operations were suited for relocation and which could share with commercial users.

Operators such as AT&T and Verizon Wireless, a venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L), have called on the government to make good on its promise to find more spectrum for wireless customers.

Without more efficient use of the nation's spectrum, there is a risk consumers will experience clogged networks, more dropped calls and slower connection speeds on wireless devices.

The FCC, which manages commercial spectrum licenses, and the Commerce Department, which oversees government spectrum, have been working together to locate unused spectrum.

The 1755-1850 MHz band is the last contiguous block of federal airwaves below 3 gigahertz - the spectrum preferred by the wireless industry - the government has to work with, Strickling added.

(Editing by Andre Grenon)

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